Recent significant fluctuations in gold prices have not only captured market attention but have also heightened focus on the gold purchasing trends of central banks worldwide.
Data released by the People's Bank of China on April 7 shows that China's central bank has increased its gold holdings for 17 consecutive months. A report from the World Gold Council on April 2 indicates that global central banks continued to buy gold in February, with net purchases of approximately 27 tons. Poland contributed significantly to this figure, purchasing 20 tons. Since central banks slowed their buying pace in January (net purchases of about 5 tons), total purchases for the first two months of the year amounted to roughly 31 tons, notably lower than the 50 tons recorded in the same period last year. Meanwhile, recent gold "selling" by the central banks of countries like Turkey and Russia has sparked discussions about whether global central bank gold reserve strategies are shifting.
The divergence in gold trading among central banks signals two key points.
First, gold "selling" by some central banks does not constitute a complete liquidation but is rather a tactical decision driven by liquidity needs.
For example, data from Turkey's central bank on April 2 revealed that its gold reserves fell by 69.1 tons in the week ending March 28, marking a cumulative decline of 118.4 tons over two weeks—the largest two-week drop since records began in 2013.
While this data might suggest the Turkish central bank is offloading gold, a closer look shows that, aside from some direct sales, a significant portion of the movement was executed through swap transactions. Swap transactions are short-term financing operations, essentially involving "exchanging gold for foreign currency with an agreement to repurchase later." In this arrangement, the central bank transfers gold to a counterparty in exchange for U.S. dollars of equivalent value, while simultaneously entering a forward contract to buy back the gold at a slightly higher price in the future. This is not a permanent sale. The primary goal of the Turkish central bank's action is to maintain currency stability, support the lira's exchange rate, and enhance market liquidity. In fact, gold's strong liquidity during such times underscores its importance within a nation's reserve system.
Second, monthly fluctuations in gold purchases have not altered the broader trend of sustained accumulation by global central banks.
World Gold Council data shows that central banks slowed their purchasing pace in January, leading to significantly lower total purchases in the first two months compared to the previous year. From a long-term perspective, central banks' gold acquisition decisions are based more on medium- to long-term strategic considerations and exhibit high stability. Short-term gold price volatility has limited practical impact and often reflects tactical adjustments.
In January, gold prices climbed steadily, reaching a record high of $5,598.75 per ounce by month-end, before entering a period of fluctuation and correction in February. After slowing in January, central bank gold purchases returned in February to levels consistent with the monthly average, suggesting a flexible approach to managing acquisition costs. A UBS research report projects that global central banks will remain net buyers of gold in 2026, with estimated annual purchases between 800 and 850 tons, only slightly below the 860 tons recorded in 2025.
As the saying goes, "true gold fears no fire." Despite short-term divergence in central bank gold trading activities, their actions are aimed at adjusting balance sheet structures and continuously optimizing international reserve portfolios. Gold, as a universally accepted ultimate means of payment, continues to validate its importance as a reserve asset. The ongoing trend of central bank gold accumulation is expected to provide stable support for future gold prices.
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